One of the recent "Who do you think you are" series on BBC covered some of this.
Alister McGowan (the "scottish" comedian) found he had Indian ancestors.
He went there and found that the Indians and English were encouraged to marry. One of his soldier ancestors married an indian lady, and there is a whole load of McGowans living in India who dress and act like the English, but look indian.
When the raj was at its height many of these anglo - indian's were given jobs by the English (the feeling being that being part English they would support the English).
Later when other countries had revolutions where the locals rioted the English in India got worried and stopped giving the anglo - english jobs (or held back their promotion) and became a sort of underclass, neither English or Indian.
Well worth seeing the program if you get the chance.